Budgetary control

The examples in Using Budgets demonstrate an account structure where a budget is applied to the group account only. However, budgets can be set at different levels in your account code structure. You can:

Set the budget at a high level on group accounts, in which case the actuals posted at the lower level are totalled and compared to the higher level budget figure.

Set the budget at a low level on posting accounts. Again these are totalled and reported against a group budget figure, if applicable.

Combine the above methods to assign a budget for a group of accounts and also set individual budgets on individual postings accounts.

Set budgets on accounts independent to any group budgets. To do this, the account number used for that account should be different to any other group account in your Chart of Accounts (account number 0913 in the following three examples illustrates this).

The following examples show how you can incorporate budgets into your nominal accounts and the results to expect. The examples use nominal accounts without cost centre and department codes. If you are using cost centre and departments, the cost centre and department codes must be the same for the group account and the associated posting accounts.

Using budgets with posting accounts

To obtain a detailed level of budgetary control, assign a budget value to each posting type account.

If there are group accounts for these posting accounts the group account must have a budget type group, but this is only applicable if the group account does not have its own budget. If it does have a budget, then the budget type can be set to either annual, monthly or profiled.

The reported group budget figure is the total of all the individual posting accounts budgets in that group.

Accounts with no budget set are not included in the budget reports.

Example 1: budgets assigned to posting accounts
Account type	Account reference	Budget type	Budget amount	Actuals amount
Group	08	Group
Posting	0803	Annual	6,000	5,000
Group	081	Group
Posting	0812	Annual	5,000	2,000
Posting	0813	No budget		6,000
Group	082	Group
Posting	0823	Annual	2,000	1,000
Posting	0824	Annual	1,500	300
Posting	0825	Annual	3,000	500
Posting	0913	Annual	3,000	2,900
The detailed budget report shows:
Report line	Account reference		Budget figure	Actuals figure
Posting total	0803		6,000	5,000
Group total	081		5,000	2,000
Group total	082		6,500	1,800
Group total	08		17,500	8,800
Posting total	0913		3,000	2,900

Using budgets with group accounts

If you require only a high level of budgetary control, set the budget at the group account level and assign a Budget Type of Group to the posting accounts you want to group. This assigns one budget value to all the posting accounts in the group.

The actuals reported against the group budget figure are the total of all the actuals on the posting account in the group (except those with no budget set).

Example 2: budgets assigned to group accounts
Account type	Account number	Budget type	Budget amount	Actuals amount
Group	08	Annual	28,000
Posting	0803	Group		5,000
Group	081	Annual	3,000
Posting	0812	Group		2,000
Posting	0813	No budget		6,000
Group	082	Annual	2,000
Posting	0822	Group		1,000
Posting	0824	Group		300
Posting	0825	Group		500
Posting	0913	Annual	3,000	2,900
The detailed budget report shows:
Report line	Account number		Budget figure	Actuals figure
Group total	081		3,000	2,000
Group total	082		2,000	1,800
Group total	08		33,000	8,800
Posting total	0913		3,000	2,900

Using budgets with a combination of group and postings accounts

You can set high level budgetary control together with detailed budgetary control. To do this:

Assign a Monthly, Annual or Profiled budget type to the posting accounts you require detailed budget information for.
Assign the budget type Group to the posting accounts that do not have an individual budget but look to the group accounts for the budget.
Assign the budget type Annual to the group type account, ensuring that the budget amount set on this account does not include the individual budget values for the posting accounts.

When the budget report is prepared, the total budget figure for the group account and the individual accounts are rolled up together to report the overall group budget figure. The actual figure on all the posting accounts is rolled up to report the overall actuals figure for the group.

When groups of accounts have subgroupings exactly the same process applies; e.g. the overall group budget figure is the total of the figure set on the group account, plus all those set on each subgroup account and any set on individual posting accounts in the group.

Example 3: budgets with a combination of accounts
Account type	Account number	Budget type	Budget amount	Actuals amount
Group	08	No Budget
Posting	0803	Annual	6,000	5,000
Group	081	Group	10,000
Posting	0812	Annual	5,000	2,000
Posting	0813	No budget		6,000
Posting	0814	Group		8,000
Group	082	None
Posting	08224	Group		1,000
Posting	08226	Group		300
Posting	08238	Annual	3,000	500
Posting	0913	Annual	3,000	2,900
The detailed budget report shows:
Report line	Account number		Budget figure	Actuals figure
Posting total	0803		6,000	5,000
Group total	081		15,000	10,000
Posting total	08238		3,000	500
Group total	08		24,000	16,800
Posting total	0913		3,000	2,900

Processing assumptions

To summarise, when calculating the budget and actual figures in budget reports the system makes these assumptions:

The overall group budget consists of the total of any budget amounts set up on all accounts in the group, whether group or posting accounts.

The overall group actuals consist of the actuals recorded against all the posting accounts in that grouping, unless the budget type on the posting account is set to No Budget.

Posting accounts with budget figures are reported on independently but also as part of the group they belong to, if applicable.

Group accounts with the budget type of No Budget are ignored for budget reports.